Alten: H1 2018 analysts' meeting feedback: working capital issues to be solved
Alten: (BUY, Fair Value EUR102 vs. EUR100 (+13%))H1 2018 analysts' meeting feedback: working capital issues to be solved
We reiterate our Buy rating and raise our DCF-derived Fair Value to EUR102 from EUR100 following the analysts’ meeting held on Friday last week. Despite a slight downward revision to our operating margin forecasts (-0.2ppt for 2018, -0.1ppt beyond), we raise our adj. EPS estimates by 1-2% as we cut our tax rate by 1ppt (28% vs. 29%). Alten is cautious on the margin for H2 2018, but we are reassured on the reasons why free cash flow fell by 45% in H1 and how Alten get back on track.
Alten is a holding company. Through its subsidiaries, Co. operates in three areas: Engineering and Technology Consulting (ETC), Telecoms Networks and Multimedia, and Information Systems (NTIS). Through the Engineering and Technology Consulting (ETC) segment, Co. studies and designs technology products for technical divisions in industry and telecoms. The Telecoms Networks and Multimedia segment focuses on Product design, Architecture, deployment, and operation of networks. Lastly, the IT systems segment comprises Applications and software development, and Infrastructure and Telecoms (Applications, systems and networks Corporate telecommunications).
Since 1996, Bryan, Garnier & Co has been growing with an absolute conviction that the investment banking landscape would experience a major revolution: most of the large local generalist banking groups will disappear to the benefit of a handful of global powerhouses, and an emerging group of independent, highly specialised boutique investment banks.
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